Ukraine has been on a shopping spree lately. On Nov. 17, Kyiv announced plans to buy up to 100 French-made Rafale fighter jets over the next 10 years. Just a few weeks earlier, the Ukrainian government had disclosed a similar deal to purchase up to 150 Swedish Gripen jets. These announcements were not made at random: Ukraine has recently made a point of showing European Union countries that it would make good use of Russia’s immobilized central bank reserves if the bloc were to finally seize and transfer these assets to Kyiv’s coffers.
However, the U.S.-Russia plan to end the war has other ideas for the future of these assets, which total roughly $300 billion and are mostly held at EU-based institutions. A clause in the 28-point road map suggests that the reserves would serve as the equivalent of a signing bonus for the United States, which may help explain U.S. President Donald Trump’s keen interest in quickly sealing the deal. While the provisions of the U.S.-Russia plan are alarming, they also present an opportunity for Europeans to potentially block it: If the EU seizes Russia’s central bank assets before Washington does, the bloc may be able to significantly curb Trump’s interest in what is a bad and dangerous deal for both Ukraine and Europe.
How they will continue financing the war starting next spring has kept Ukrainian policymakers awake at night lately. Ukraine’s budget numbers for the next two years do not add up. The International Monetary Fund (IMF) estimates that Ukraine faces a budget gap of $65 billion in 2026-27—excluding military equipment and ammunition—and no source of funding has yet been confirmed. Once military expenses are factored in, the funding gap could reach $155 billion over the next two years. With the United States out of the equation and Ukrainian domestic revenues falling far short of covering war-fueled expenses, Europe is in the driver’s seat to help Ukraine plug its budget gap.
Many observers believed that after years of wrangling, last month’s European Council meeting would strike a deal to seize Russia’s central bank assets. The parameters of such a scheme have been broadly agreed on: Financial institutions holding Russian central bank reserves would transfer the assets to the European Commission, which would then issue a $161 billion reparations loan to Ukraine. However, the loan is not a loan but an advance: Kyiv would repay the debt only if Moscow agreed to war reparations. France and Germany recently dropped their vetoes of the plan, paving the way for the seizure of the assets in time to finance Kyiv starting next year.
Belgium derailed the October meeting by demanding that all EU member states guarantee the loan. Brussels’s concerns are not unfounded: Belgium-based Euroclear holds 86 percent of EU-held Russian state assets, meaning that Belgium could be liable if Russia successfully sues to get its money back. In November, European Commission President Ursula von der Leyen pressured Belgium by giving member states an ultimatum: They could support Ukraine either by seizing Russian assets or by taking on new debt. This was a smart move. Von der Leyen knows full well that EU capitals will resist adding new debt to their national balance sheets, making Russian assets the only viable option to bankroll Ukraine.
Fast-forward to last week, when the Trump-endorsed plan reshuffled the cards. The deal stipulates that U.S. firms will get $100 billion in Russian frozen assets to fund Ukraine’s reconstruction, with the U.S. government receiving 50 percent of the venture’s profits. This clause will not come as a surprise to observers of recent U.S. trade deals with Asian countries. As part of its July agreement with Washington, Tokyo committed to spending $550 billion of Japanese taxpayers’ money on U.S. soil by January 2029. South Korea will similarly invest $350 billion.
The U.S.-Russia proposal contains two other financial clauses benefiting Washington. First, the remaining frozen funds, roughly $200 billion, would be used in a U.S.-Russia investment vehicle; thus, the United States would receive a $300 billion signing bonus if the plan goes through. Second, European taxpayers would cover another $100 billion of Ukraine’s reconstruction costs.
These financial clauses signal brewing trans-Atlantic battles over the fate of Russia’s reserves. The United States holds only 1.5 percent—roughly $5 billion—of these assets, while EU countries collectively hold nearly three-quarters. This means that the proposed scheme effectively allows the United States to seize the EU’s claims to the assets. Some experts hope this makes the plan moot, but they may be overly optimistic. It is not hard to imagine how Washington could pressure the EU (see tariff threats) and Euroclear (perhaps using blackmail over access to the U.S. dollar) to release the funds. There are precedents for such pressure. In 2012, the Belgium-based SWIFT financial network had no choice but to cut ties with Iranian banks amid intense pressure from Washington.
Seen from Ukraine, the financial provisions of the U.S.-Russia plan, much like the rest of the plan, are catastrophic. A U.S. takeover of Russia’s frozen assets would cut off Kyiv’s only credible financial lifeline: the EU reparations loan secured by these assets. If the U.S.-Russia plan fails to bring peace, which is quite possible given its weak to nonexistent security guarantees, it will be difficult for Kyiv to finance military spending. In a final twist of fate, Ukraine has just started negotiations for a new loan with the IMF—a critical step for international donors to step in. However, the United States is the IMF’s largest shareholder, making a new loan unlikely without Trump’s support. Moreover, the fund can only lend to countries that have a reasonable chance of repaying their IMF debt. Without the EU loan, it is unclear how Kyiv could meet this criterion.
The fate of the U.S.-Russia plan hinges on the EU’s ability to swiftly seize Russia’s frozen assets. If Belgium drops its opposition to a seizure and the EU quickly issues the reparations loan—meaning within days, not weeks—the bloc could make one of the key clauses of Trump’s plan moot, possibly making the entire agreement far less appealing to him.
The question is no longer whether Russia’s central bank assets will be seized but by whom. Europeans have a choice: They can support Ukraine and use their best leverage to influence the U.S.-Russia plan, or they can allow Washington to confiscate the money for the United States and Russia’s benefit. Ironically, until last week, Washington had been an enthusiastic backer of the EU seizing Russian assets. Now, Trump wants them for America first.